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How Much of Its Oil Cushion Is China Willing to Sacrifice?
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China has quietly become the global oil market's most important stabilizing force since conflict erupted in the Middle East five months ago — not by producing more crude or releasing emergency reserves, but by buying dramatically less oil.
While inventories remain substantial, Chinese policymakers increasingly appear to view them as a strategic asset whose value lies in preserving energy security and policy flexibility — not simply insulating China from high oil prices.
Analysts at JPMorgan estimate global liquids demand has fallen by roughly 5.1 million b/d since the Mideast conflict began — offsetting nearly one-third of the supply disruption — while inventory releases accounted for another 3.6 million b/d of the Mideast supply loss.
China contributed most of that demand adjustment by slashing crude imports by some 5 million b/d, sharply reducing competition for available cargoes.
In June, China ran 2.7 million b/d less crude in its refineries compared to pre-conflict levels, Energy Intelligence reckons.